Rotman School of Management
University of Toronto
NBER Working Papers and Publications
|November 2017||Fast and Slow Learning From Reviews|
with Daron Acemoglu, Ali Makhdoumi, Asuman Ozdaglar: w24046
This paper develops a model of Bayesian learning from online reviews, and investigates the conditions for asymptotic learning of the quality of a product and the speed of learning under different rating systems. A rating system provides information about reviews left by previous customers. A sequence of potential customers decide whether to join the platform. After joining and observing the ratings of the product, and conditional on her ex ante valuation, a customer decides whether to purchase or not. If she purchases, the true quality of the product, her ex ante valuation, an ex post idiosyncratic preference term and the price of the product determine her overall satisfaction. Given the rating system of the platform, she decides to leave a review as a function of her overall satisfaction....
|June 2013||Network Security and Contagion|
with Daron Acemoglu, Asuman Ozdaglar: w19174
We develop a theoretical model of security investments in a network of interconnected agents. Network connections introduce the possibility of cascading failures due to an exogenous or endogenous attack depending on the profile of security investments by the agents. The general presumption in the literature, based on intuitive arguments or analysis of symmetric networks, is that because security investments create positive externalities on other agents, there will be underinvestment in security. We show that this reasoning is incomplete because of a first-order economic force: security investments are also strategic substitutes. In a general (non-symmetric) network, this implies that underinvestment by some agents will encourage overinvestment by others. We demonstrate by means of examples...
Published: Acemoglu, Daron & Malekian, Azarakhsh & Ozdaglar, Asu, 2016. "Network security and contagion," Journal of Economic Theory, Elsevier, vol. 166(C), pages 536-585. citation courtesy of